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Resolving Commercial Disputes Printable Version

One of the factors which makes Trinidad and Tobago attractive to foreign investors is the fact that they can expect any disputes in which they may become involved to be determined impartially by a judiciary whose independence is protected by the Constitution of Trinidad & Tobago.

 

In this Chapter, Debra Thompson and Catherine Ramnarine, Partners in Hamel-Smith’s Dispute & Risk Management Practice Group, provide an overview of the civil litigation process, including some of the procedures which may apply when a party needs to obtain prompt relief in urgent commercial cases. 


The Legal System

Sources of Law

 

Trinidad & Tobago has a traditional common law system (similar to that of the UK) that is based on:

 

The Constitution

 

The Constitution is the supreme law of Trinidad & Tobago. Fundamental human rights and freedoms, including rights to liberty, expression, property, freedom of association and freedom of the press are expressly recognised and entrenched by the Constitution. The enjoyment of these rights is constitutionally guaranteed not only for citizens but also for foreign individuals and legal entities.

 

Legislation

Statutes enacted by the Trinidad & Tobago Parliament are, in general, modeled after UK legislation, the major exception being the Companies Act (which is based on the Canadian model).

 

Common Law

The doctrine of precedent (legal principles derived from decided cases) applies in Trinidad & Tobago and ensures, as far as possible, consistency in legal decisions. Decisions of the Supreme Court and the Privy Council are binding upon all local courts, while those of the UK and to some extent other Commonwealth Courts, especially Australia, New Zealand and Canada, are considered highly persuasive.

 

The Courts

 

Most commercial disputes (unless they are resolved 'out of Court' by negotiations between the parties, mediation or some other form of alternative dispute resolution) will be heard and determined by the Supreme Court, which comprises:

 

•   The High Court where all civil (non-criminal) trials are determined by a single judge without a jury; and

•   The Court of Appeal; (generally consisting of a panel of three Appeal Judges.)

 

Decisions of the Court of Appeal can be appealed to the Judicial Committee of the Privy Council in the United Kingdom, which is the highest appellate court of Trinidad & Tobago. Such appeals lie as of right in most matters.

     

The Judiciary

 

The Judiciary is independent from the executive and legislative branches of Government. The Judges of the High Court and Court of Appeal are appointed by the Judicial and Legal Services Commission (an independent body) while the Judges of the Judicial Committee of the Privy Council are essentially the same Judges who sit in the House of Lords in the United Kingdom.

 

Choice of Law

 

It is possible for a contract to expressly provide that it is to be governed by the law of a country other than Trinidad & Tobago. Such a clause would generally be recognised and given effect by the Trinidad and Tobago Court provided that the relevant choice of law is bona fide and legal and there is no reason for avoiding the choice on grounds of public policy.

 

The Civil Litigation Process

 

The New Civil Proceedings Rules

The 'new' Civil Proceedings Rules (“CPR”), which mirror similar reforms introduced in the UK, came into force in September 2005.  The CPR is geared towards improving the efficiency of the litigation process and expediting the resolution of disputes. One important by-product of this is the need to 'front load' case preparation. It is important that comprehensive instructions, including relevant documentation and records, are provided at a very early stage and, in most cases, prior to an action being filed.

 

Settlement of disputes is also encouraged and facilitated under the CPR, as is the increased use of technology.

 

The Litigation Process Generally

 

Before the Commencement of Litigation - The Pre Action Protocols:

The Practice Direction on Pre-Action Protocols (“the Protocols”) issued by the Supreme Court outlines the steps that parties should take in relation to prospective legal claims. The Protocols are, in general, aimed at encouraging the early exchange of information about the claim between the parties, so as to:

(a)   enable the parties to avoid litigation by exploring the possibility of settlement before litigation is commenced; and/or

(b)   support the efficient management of those disputes that do proceed to litigation.

 

Non-compliance with the Protocols may be taken into account by the Court when awarding costs for or against the parties at the conclusion of litigation.

Before commencing litigation, the party suing (the claimant) is required to write to the party being sued (the defendant) giving details of the claim. The Defendant is required to provide a detailed response within a reasonable time which is generally taken to be about 28 days.

 

The claimant's letter should:

•   Give sufficient details to enable the defendant to understand and investigate the claim;

•   Enclose copies of the essential documents on which the claimant relies;

•   Require a prompt acknowledgment;

•   Require a full response within a reasonable period (generally one month);

•   Request and ask for copies of any essential documents which the claimant wishes to see; and

•   State whether the claimant wishes to enter into mediation or another alternative method of dispute resolution.

 

The defendant’s response should:

•   Give detailed reasons why the claim is not accepted, identifying which of the claimant’s contentions are accepted and which are in dispute;

•   Enclose copies of the essential documents on which the defendant relies;

•   Enclose copies of the documents requested by the claimant or explain why they are not enclosed;

•   Identify and request copies of any additional essential documents which the defendant wishes to see;

•   State whether the defendant is prepared to enter into mediation or another alternative method of dispute resolution.

 

If the Claimant receives no or no satisfactory response to its letter, or if the parties are unable to resolve the matter at the Pre-Action stage, the Claimant may commence litigation proceedings.

 

The Pre-Action Protocols require significant case preparation and disclosure by both the Claimant and the Defendant prior to the commencement of litigation. This affords an opportunity for some disputes to be resolved in a cost effective and timely manner without having to resort to litigation. However, it also necessitates the front loading of cases and the provision of detailed, comprehensive instructions, documents and records at a very early stage.

 

Initiating a Claim

 

The Claimant commences litigation by filing a 'Claim Form' and a 'Statement of Case' at the High Court. The Claimant's Statement of Case must set out all the facts on which he relies, identify or annex copies of all documents necessary to prove its case, and contain a 'statement of truth' by or on behalf of the Claimant certifying its contents. It is the Claimant's responsibility to ensure that the Claim Form and Statement of Case are personally served on the Defendant. If the Defendant is not in Trinidad & Tobago, a special application for permission to serve him out of the jurisdiction must be made to the Court. 

 

Disputing a Claim

 

A Defendant who has been served with a claim must, if he disputes it:

•   Within 8 days of being served, file an ‘Appearance’ giving notice of his intention to defend the claim; and

•   File a ‘Defence’ within 28 days of service. The Defence must include a short statement of all the facts on which the defendant relies to dispute the claim against him and must state which of the allegations in the Statement of Case he admits and which of them he disputes. Copies of all documents necessary to the defence must also be annexed. As a general rule, a Defendant will not be allowed to rely on any allegation(s) which he did not mention in his Defence unless the court gives him permission to do so. The parties may agree to a single extension of time for filing the Defence up to three months after the date of service, but any further extensions of time can only be made by court order.

 

The Claimant may file a Reply to the Defence if he obtains the Court's permission to do so.

 

Once the first Case Management Conference (see below) in the matter has taken place, neither party will be allowed to amend the Statement of Case or Defence unless he can prove that there was some change in circumstances that only became known to him after that Case Management Conference. This underscores the importance of early case preparation and the need to provide detailed instructions, including supporting documentation, as early as possible.

 

Case Management & Pre-Trial Directions

One of the innovations of the CPR is the introduction of case management, which is intended to enable the Court to deal with cases as justly and efficiently as possible. A docket system is used under which an action is assigned to one judge who actively manages it from case management to final disposition at trial.

 

Case Management Conference

Once a Defence has been filed, the action will be assigned to a Judge and a Case Management Conference ("CMC") will be scheduled. The general rule under the CPR is that a party (or where that party is a company, a person who is in a position to represent its interests) must attend the CMC.

The CMC does not take place in 'open' Court and more closely resembles (as the name suggests) a conference between the parties, their attorneys-at-law and the Judge rather than a formal hearing. Notwithstanding this, the Judge is empowered to make a wide range of orders at the CMC and will typically fix timetables for the progress of the case, make directions for the disclosure and inspection of documents or filing of Witness Statements and/or hear and determine any applications made by the parties.

 

Disclosure of Documents

Each party is required under the CPR to 'disclose' (by the filing of a 'List of Documents') all documents that are or have been in his control which are directly relevant to the action. This includes not only documents on which that party intends to rely, but also documents that tend to adversely affect his case and/or support the other party's case. Either party can inspect and take copies of the documents listed in the other party's List of Documents. Certain documents, including communications between a party and his legal advisor are privileged from production.

.

Witness Statements

The general practice under the CPR is for parties to file 'Witness Statements' (statements made by their intended witnesses of the evidence that they intend to give at trial) prior to the trial of the matter. This is intended to enable each party to assess the strength of the other party's case and to reduce the time that the actual trial takes. A Witness Statement (once put into evidence at trial) stands as that witness' evidence 'in chief' and avoids him having to give oral testimony of same, although he may still be cross examined by the other party's attorney. A witness is allowed to 'amplify' his witness statement at trial but cannot give evidence of new matters unless they arose after the Witness Statement was filed. Where an order for the filing of Witness Statements has not been complied with, the relevant witness cannot give evidence at trial.

 

Prior to trial, the parties may also agree on and file a bundle of the documents which they intend to use at the trial as well as statements of the facts and issues in dispute between them. A Judge may schedule a 'Pre-Trial' Review hearing before trial in order to ensure that all pre-trial directions have been complied with.

 

Trial

Civil trials are heard by a single Judge without a jury. In general, the Claimant will present his case (including the evidence of his witnesses) first, followed by the Defendant. After each party presents its case oral submissions may be made, unless the Court directs that submissions be made in writing. Once all the evidence and submissions have been given, the case is closed. Judgment is given either immediately or "reserved" to a later date.

 

Costs

The general rule is that an unsuccessful party will be ordered to pay the reasonable legal costs incurred by the successful party. However, the costs which a successful party can recover will not necessarily be the same as the legal fees paid. The default position under the CPR is that the costs to which a successful party is entitled will be calculated on a sliding scale of fixed percentages of the total value of the claim. Alternatively, the parties may apply for a costs budget to be set. 

 

Appeal

Appeals from decisions of the High Court lie to the Court of Appeal, while decisions of the Court of Appeal can be appealed to the Judicial Committee of the Privy Council.

 

Expedited/Urgent Cases

 

Judgments Without Trial

In cases where a Defendant has no or no arguable defence to a claim, it may be possible to obtain judgment against him relatively quickly and cost effectively and without a full trial. 

 

Default Judgment

Where a Defendant has been served with the Claim Form and Statement of Case but fails to file an Appearance and/or Defence within the time stipulated for doing so, the Claimant can, and in most cases does, obtain default judgment against him. An application for default judgment is made in writing to the Registrar of the Supreme Court and does not require a hearing.

 

A Defendant who has had judgment in default entered against him may apply to the Court to have it set aside where he can show that he had a realistic prospect of successfully defending the claim, provided that the application is made as soon as reasonably practicable after he finds out that default judgment has been entered against him.

 

Summary Judgment

A party can apply to the Court for summary judgment on the whole or part of the claim where he can show that the other party to the action has no realistic prospects of success.

 

Urgent Remedies

The Courts may in appropriate circumstances grant urgent interim relief in the form of injunctions, freezing injunctions and/or search orders before a trial occurs, where it can be demonstrated that such relief is necessary. In many cases the grant of such interim relief effectively decides the outcome of the dispute or results in a negotiated settlement.

 

Injunctions

In certain circumstances a Court may be prepared to grant an injunction before trial restraining a party from doing something (a prohibitory injunction) or commanding them to do something (a mandatory injunction).

 

A Court would, in general, only grant an injunction if satisfied that the harm likely to be suffered by the claimant without the injunction is greater (in both likelihood and extent) than the harm that would be suffered by the defendant if it were granted. In making this assessment the Court will consider the strength of the Claimant's case and his likelihood of success at trial, the severity of the harm that each party would suffer and the extent to which monetary damages would be adequate compensation for such harm. It is important that the application for the injunction be made as expeditiously as possible as delay tends to be a factor weighing against the Court’s granting of such relief.

 

Injunctions can be granted ex parte (i.e. in the absence of the other party) in suitably urgent cases. Such injunctions are usually granted for a short interim period until the other party has the opportunity to appear before the Court and explain its reasons, if any, for contending that the injunction should not be continued until trial. A party that applies for an ex parte injunction must fully disclose all material facts and provide an undertaking to satisfy any claim for damages suffered by the other party that may have resulted from the injunction should it subsequently be shown that the injunction ought not to have been granted.

 

Freezing Injunctions (Prevention of Dissipation of Assets)

A Defendant may attempt to dispose of his assets before trial so as to prevent any judgment obtained against him from being enforced (as he would have no assets out of which to satisfy the judgment debt). A Freezing Injunction is designed to prevent this from happening by prohibiting the defendant from dealing with his assets or removing them from the jurisdiction. Because the Freezing Injunction represents a significant restriction on the defendant's rights (effectively denying him access to his own assets) it will only be granted if certain conditions are fulfilled.


The Claimant must:

•   Show that he has a good arguable case and is likely to recover judgment against the defendant for a certain or approximate sum.

•   Make full and frank disclosure of all material facts.

•   State fairly the points which the defendant could advance against his claim.

•   Show that the defendant has assets within the jurisdiction and identify such assets as far as possible.

•   Show that there is a real risk that the defendant would remove the assets before the judgment is satisfied.

•    Provide an undertaking to pay damages to the defendant if he fails in his claim or it is decided subsequently that the injunction should not have been granted.

 

Search Orders (Preservation of Evidence)

A Defendant that is being or is about to be sued may attempt to destroy evidence that can be used against him. A Search Order is designed to prevent this from happening by compelling the Defendant to allow the Claimant to enter into his premises to search for, inspect and remove documentary and other evidence with a view to ensuring its preservation until trial. This type of order is obtained “in camera” (in the absence of the public) and without the other side being present. It is of particular significance in copyright and passing off actions.

 

Because of the draconian nature of the Search Order, it will only be granted if the Claimant meets certain pre-conditions. The Claimant must:

  • Establish an extremely strong prima facie case and show that he is likely to succeed in the action.

  • Present clear evidence that the defendant has incriminating evidence in his possession and that there is a real possibility that he would destroy it.

  • Show that he is likely to suffer very serious actual or potential damage from the Defendant’s actions and demonstrate a “paramount need to prevent a denial of justice to the Claimant” which cannot be met simply by an order for delivery up or preservation of the documents.

  • Make full and frank disclosure.

  • Provide an undertaking to pay damages.  

Additionally, the party seeking such an order must also ensure that it contains all proper safeguards for the absent party including, for example, an undertaking that the order (together with the material on which it was granted) will be served on the defendant by an independent Attorney who will explain the terms of the order to the defendant and advise him to seek immediate advice.

 

Conclusion

In Trinidad and Tobago where litigation is necessary to protect a party’s interests, the Trinidad & Tobago Courts provide an independent and impartial forum for the just resolution of commercial disputes, as well as a modern procedural system that caters for the grant of appropriate interim relief.■

 


 
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